NSW will lose $50m if laws not loosened

The Premier, Bob Carr, has asked the Prime Minister to intervene to prevent NSW losing more than $50 million in funding as punishment for failing to deregulate its taxi licences, alcohol sales and other industries.

The Federal Government's competition watchdog, the National Competition Council, which monitors the states' commitment to competition reforms, has said NSW should be stripped of $51.4 million for failing to deregulate in five areas.

Writing to John Howard yesterday, Mr Carr warned that NSW could not afford the penalty and would be compelled to implement new policies.

In a thinly veiled threat, he said NSW would do so under the strongest protest and would sheet the blame home to the Federal Government.

In the case of deregulation of taxi licences, Mr Carr said, the council's ruling would result in a "flooding of the Sydney market with new taxi licences at a time when drivers argue they are struggling to earn a living wage".

On the council's insistence that NSW deregulate liquor sales, Mr Carr said it would lead to unregulated proliferation of alcohol retail outlets across the state. It is likely to mean that alcohol could be sold in supermarkets, alongside groceries, as occurs in the ACT.

In Parliament, Mr Carr pointed out that NSW had just held a summit on alcohol abuse, and did not want to introduce a knee-jerk response.

The council is also seeking to remove collective bargaining for chicken growers, which is used to protect small operators against the pricing practices of big firms.

It also wants deregulation of the ownership of dental surgeries, pharmacies and optometrists to allow non-professionals to own them. The last area of contention is a scheme that requires compulsory mediation between farmers and banks.The council wants it removed.

"That would mean the banks would move in, sue and evict farmers without being forced to sit down and negotiate," Mr Carr said.

Mr Carr said this was particularly harsh at a time of drought, when farmers were under financial pressure.

"If the Commonwealth insists on putting the gun to our head - that is, cuts our funding - we will have no choice but to implement those reforms."